Here's What EEKA Fashion Holdings Limited's (HKG:3709) Shareholder Ownership Structure Looks Like

A look at the shareholders of EEKA Fashion Holdings Limited (HKG:3709) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

EEKA Fashion Holdings isn't enormous, but it's not particularly small either. It has a market capitalization of HK$8.3b, which means it would generally expect to see some institutions on the share registry. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let's delve deeper into each type of owner, to discover more about EEKA Fashion Holdings.

View our latest analysis for EEKA Fashion Holdings

What Does The Lack Of Institutional Ownership Tell Us About EEKA Fashion Holdings?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of EEKA Fashion Holdings, for yourself, below.

We note that hedge funds don't have a meaningful investment in EEKA Fashion Holdings. The company's CEO Ming Jin is the largest shareholder with 41% of shares outstanding. For context, the second largest shareholder holds about 29% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder. Interestingly, the second-largest shareholder, Rui Jin is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of EEKA Fashion Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own the majority of EEKA Fashion Holdings Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$5.8b stake in this HK$8.3b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 21% ownership, the general public have some degree of sway over EEKA Fashion Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 8.7%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for EEKA Fashion Holdings you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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